2 My Subsc Analyzing and Interpreting Tax Footnote Fischer, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $80,884 and cash paid for taxes of $77.546. The tax footnote in the company's 10-K filing, reports the following deferred tax information. Deferred tax assets and liabilities consisted of the following (in thousands): December 31 (s thousands) 2010 2009 Deferred tax assets State tax credits, net of federal tax impact $3,500 $ Tax basis inventory adjustment 6,104 3,748 Inventory obsolescence reserves 4,528 5,600 Allowance for doubtful accounts and other reserves 17,992 14,084 Foreign net operating loss carryforward 21.834 18,952 Stock-based compensation 17,580 10.900 Intangible asset 774 2.136 Deferred rent 5,950 3,456 Deferred compensation 2,898 2.210 Other 5.418 6,302 Total deferred tax assets 86,548 67,388 Less valuation allowance (3.530) Total net deferred tax assets 83,018 67,388 Deferred tax liabilities Prepaid expenses (3.730) (2.266) Property, plant and equipment (6.208) (11.566) Total deferred tax liabilities 19.938) (13,832) Total deferred tax assets, net $ 73,000 $53,556 (a) Did Fischer's deferred tax assets increase or decrease during the most recent fiscal year? Fischer's deferred tax assets by $ (thousands). Which of the following best summarizes our interpretation of an increase in a company's deferred tax assets for the most recent year? Deferred tax assets increased during the year, which means that the company reported more as a tax expense on its income statement than it paid in taxes. Deferred tax assets generally arise when tax deductions are less than tax expense reported in the income statement. Because deferred tax assets increased w Type here to search BH Torrem Lepun Total deferred tax assets, net B E0574 $ 73,080 $53,556 (a) Did Fischer's deferred tax assets increase or decrease during the most recent fiscal year? Fischer's deferred tax assets (thousands). by 5 Which of the following best summarizes our interpretation of an increase in a company's deferred tax assets for the most recent year? Deferred tax assets increased during the year, which means that the company reported more as a tax expense on its income statement than it paid in taxes. ODeferred tax assets generally arise when tax deductions are less than tax expense reported in the income statement. Because deferred tax assets increased, we can concluded that tax deductions were greater than expense. ODeferred tax assets increased during the year, which means that the company's taxable income was less than in the prior year. ODeferred tax assets increased during the year, which means that the company paid more taxes than it reported as the tax expense on its income statement. (b) Did Fischer's deferred tax liabilities increase or decrease during the most recent fiscal year? Fischer's deferred tax liabilities by $ (thousands). Which of the following statements best describes the reason for the change in deferred tax liabilities during the most recent year? The deferred tax liabilities increased during the recent year because they paid down their tax liability, The deferred tax liabilities decreased during the recent year as a result of the reduction in its effective tax rate. The deferred tax liabilities decreased during the recent year possibly because the company is now depreciating its fixed assets more for GAAP purposes than it is for tax purposes The deferred tax liabilities decreased during the recent year because the company's taxable income was less than in prior year. (c) The company recorded a valuation allowance during the year. This allowance relates to foreign net operating tax losses. Which of the following statements appears to be false regarding the foreign net operating tax losses and the valuation allowance. CAn increase to a valuation allowance will increase current year income The company's tax returns have reported losses in foreign jurisdictions. As of the end of 2010, there were insufficient profits and the tax losses could not be used in the current period. Type here to search AG 4 1 E An increase to a valuation allowance will decrease current year income. What proportion of the foreign net operating losses does the company believe will likely expire unused? Round your answer to the nearest percent. (d) Explain how the valuation allowance affected 2010 net income. OFischer's valuation allowance account increased during the year, which means net income increased. OFischer's valuation allowance account decreased during the year, which means net income increased OFischer's valuation allowance account increased during the year, which means net income decreased. OFischer's valuation allowance account decreased during the year, which means net income decreased. (e) Use the financial statement effects template to record Fischer's income tax expense for the current fiscal year along with the changes in both deferred tax assets and liabilities. Assume that income taxes payable increased by $22,862 thousand. Use negative signs with answers, when appropriate Balance Sheet Income Statement Noncash Contributed Earned Assets Cash Asset Transaction - Liabilities Capital Revenue Capital - Expenses - incom Record tax expense port cash and part deferred Check Next Previous Save Answers Type here to search vgun. 2 My Subsc Analyzing and Interpreting Tax Footnote Fischer, Inc. reports total tax expense on its income statement for year ended December 31, 2010 of $80,884 and cash paid for taxes of $77.546. The tax footnote in the company's 10-K filing, reports the following deferred tax information. Deferred tax assets and liabilities consisted of the following (in thousands): December 31 (s thousands) 2010 2009 Deferred tax assets State tax credits, net of federal tax impact $3,500 $ Tax basis inventory adjustment 6,104 3,748 Inventory obsolescence reserves 4,528 5,600 Allowance for doubtful accounts and other reserves 17,992 14,084 Foreign net operating loss carryforward 21.834 18,952 Stock-based compensation 17,580 10.900 Intangible asset 774 2.136 Deferred rent 5,950 3,456 Deferred compensation 2,898 2.210 Other 5.418 6,302 Total deferred tax assets 86,548 67,388 Less valuation allowance (3.530) Total net deferred tax assets 83,018 67,388 Deferred tax liabilities Prepaid expenses (3.730) (2.266) Property, plant and equipment (6.208) (11.566) Total deferred tax liabilities 19.938) (13,832) Total deferred tax assets, net $ 73,000 $53,556 (a) Did Fischer's deferred tax assets increase or decrease during the most recent fiscal year? Fischer's deferred tax assets by $ (thousands). Which of the following best summarizes our interpretation of an increase in a company's deferred tax assets for the most recent year? Deferred tax assets increased during the year, which means that the company reported more as a tax expense on its income statement than it paid in taxes. Deferred tax assets generally arise when tax deductions are less than tax expense reported in the income statement. Because deferred tax assets increased w Type here to search BH Torrem Lepun Total deferred tax assets, net B E0574 $ 73,080 $53,556 (a) Did Fischer's deferred tax assets increase or decrease during the most recent fiscal year? Fischer's deferred tax assets (thousands). by 5 Which of the following best summarizes our interpretation of an increase in a company's deferred tax assets for the most recent year? Deferred tax assets increased during the year, which means that the company reported more as a tax expense on its income statement than it paid in taxes. ODeferred tax assets generally arise when tax deductions are less than tax expense reported in the income statement. Because deferred tax assets increased, we can concluded that tax deductions were greater than expense. ODeferred tax assets increased during the year, which means that the company's taxable income was less than in the prior year. ODeferred tax assets increased during the year, which means that the company paid more taxes than it reported as the tax expense on its income statement. (b) Did Fischer's deferred tax liabilities increase or decrease during the most recent fiscal year? Fischer's deferred tax liabilities by $ (thousands). Which of the following statements best describes the reason for the change in deferred tax liabilities during the most recent year? The deferred tax liabilities increased during the recent year because they paid down their tax liability, The deferred tax liabilities decreased during the recent year as a result of the reduction in its effective tax rate. The deferred tax liabilities decreased during the recent year possibly because the company is now depreciating its fixed assets more for GAAP purposes than it is for tax purposes The deferred tax liabilities decreased during the recent year because the company's taxable income was less than in prior year. (c) The company recorded a valuation allowance during the year. This allowance relates to foreign net operating tax losses. Which of the following statements appears to be false regarding the foreign net operating tax losses and the valuation allowance. CAn increase to a valuation allowance will increase current year income The company's tax returns have reported losses in foreign jurisdictions. As of the end of 2010, there were insufficient profits and the tax losses could not be used in the current period. Type here to search AG 4 1 E An increase to a valuation allowance will decrease current year income. What proportion of the foreign net operating losses does the company believe will likely expire unused? Round your answer to the nearest percent. (d) Explain how the valuation allowance affected 2010 net income. OFischer's valuation allowance account increased during the year, which means net income increased. OFischer's valuation allowance account decreased during the year, which means net income increased OFischer's valuation allowance account increased during the year, which means net income decreased. OFischer's valuation allowance account decreased during the year, which means net income decreased. (e) Use the financial statement effects template to record Fischer's income tax expense for the current fiscal year along with the changes in both deferred tax assets and liabilities. Assume that income taxes payable increased by $22,862 thousand. Use negative signs with answers, when appropriate Balance Sheet Income Statement Noncash Contributed Earned Assets Cash Asset Transaction - Liabilities Capital Revenue Capital - Expenses - incom Record tax expense port cash and part deferred Check Next Previous Save Answers Type here to search vgun